Purchasing Service Credit
Active and deferred members have the right to purchase eligible service credit before retiring or terminating employment. Purchasing service credit can increase your retirement benefit and, in some cases, allow you to retire earlier. KCERA offers two types of service purchases: Prior County/District Service and Prior Public Service (including Prior Military Service).
Prior County/District Service
You may purchase and receive retirement service credit for eligible employment that you rendered for the County of Kern or a special district. The purchased service also counts toward your five-year vesting and retirement eligibility requirements. Employment that is eligible for a prior County/District service purchase includes:
- Certain public employment before becoming a KCERA member. This includes extra-help, per-diem, temporary and part-time County/District employment, and the brief waiting period preceding a member’s KCERA entry date. It excludes work as an independent contractor or service for which you could claim a retirement benefit under another retirement system in California.
- Medical leaves of absence (LOA) without pay. This includes maternity leaves that are medically necessary.
- If you re-enter KCERA after terminating employment and withdrawing your contributions, you may redeposit the withdrawn funds to regain the forfeited service credit.
- Layoffs. If you are laid off from the County of Kern but return to the same job classification within one year, you may purchase service for the layoff period.
To receive an estimate for a prior County/District service purchase for periods after March 1999, you must first run a purchase of service estimate in your KCERA Member Portal. Once you have completed the estimate and you would like to proceed with the purchase, you must complete and return a Certification of Prior Kern County/District Service to KCERA. You may also email the completed form to firstname.lastname@example.org. Once the form is received, KCERA will start the process of obtaining your personnel records and pay records to determine the exact amount of service that is available to purchase and the exact cost. Once calculated, KCERA will mail you a purchase contract with instructions.
Prior Public Service (PPS)
You may purchase and receive retirement service credit for eligible employment that you rendered for the federal government, U.S. military and public agencies in California. The purchased service does not count toward your five-year vesting or retirement eligibility requirements—it is added only after the requirements are met. Employment that is eligible for a prior public service purchase includes:
- Employment with the federal government, including military service. You must provide a copy of your DD214 for all military service purchase request.
- Employment with the State of California; any county or city in California; or any public district situated in whole or in part in Kern County. In general, you may purchase prior public service with KCERA only if you are not eligible to receive a pension for that period of service in another agency.
To receive an estimate for a PPS purchase, including prior military service, you must first run a purchase of service estimate in your KCERA Member Portal. Once you have completed the estimate and you would like to proceed with the purchase, you must complete and return a signed Certification of Prior Public Service form for each eligible employer. You are responsible for providing all requested information in Section 1 of the Certification form. For prior military service purchases, you must complete and return a signed Certification of Prior Public Service-Military form. You may also email the completed form(s) to email@example.com.
Once KCERA receives the completed PPS Certification form, we will determine whether the listed employer is a qualifying public agency. If the former employer is a qualifying public agency, KCERA will send the Certification form to the agency. The qualifying public agency/retirement system must certify the form with your employment dates and service credit earned, confirm whether or not you are eligible for a retirement benefit in that system, and whether you have funds on deposit with them. Please note, if you have funds on deposit with the previous employer/retirement system, you CANNOT purchase the prior service with KCERA. Once the Certification form has been returned to KCERA, staff will review and determine if the service is purchasable or if additional information is required. After all required documents are received, KCERA will calculate the service and the exact cost of the purchase and mail you a purchase contract with instructions.
All military service purchase requests require a copy of your DD214. Please note, if you are eligible for or receiving a pension for your military service, you cannot purchase the service with KCERA. After KCERA has received the completed Military Certification form, we will start the process of calculating the exact amount of service that is available to purchase and the exact cost. Once calculated, KCERA will mail you a purchase contract with instructions.
KCERA offers several payments options to members who are eligible to purchase service credit:
- Lump sum payment. You can provide a personal check or cashier’s check payable to KCERA.
- Payroll deductions. You can schedule after-tax payroll deductions from your biweekly pay for up to five years, depending on the type and length of service being purchased. (Includes a finance charge during purchase contract).
- Qualified retirement account rollover. You can transfer pre-tax funds from a qualified retirement plan—401(a), 401(k), 403(b), 457(b) or Traditional IRA—for all or part of the purchase cost. There are specific rules to follow for such rollovers, so contact your plan administrator for more information.
- Vacation rollover (included in taxable income)
- Sick leave and/or vacation rollover at retirement (subject to employer’s supplemental tax rate).
If you elect to use multiple payment methods, you are responsible to pay any remaining balance to complete the service purchase. Retirement service credit will be granted in full once your purchase is complete and a receipt will be mailed. Please note, all purchases must be paid in full at retirement.
(The Memorandum of Understanding (MOU) adopted in July 1997 allows eligible KCERA members to purchase prior public service. A few special districts did not adopt the PPS provision of the 1997 MOU. Employees of these districts are not eligible to purchase prior public service in KCERA. Please contact your district’s human resources or management staff to determine your eligibility.)